Best Free Payroll Software 2026 (+ Cheap Paid)

§1The honest reality about free payroll software

Gusto

OnPay

Patriot Payroll

Wave Payroll

Payroll software has unavoidable operating costs that make truly free, full-featured tools economically impossible: tax filing infrastructure across 50 states, direct deposit banking rails, year-end W-2 and 1099 generation, and compliance updates as tax laws change. Any tool offering this for free is either subsidizing it through other revenue (accounting software upsells), cutting corners on compliance, or limiting features significantly.

Free payroll offers differ by product and payment route. Payroll4Free includes calculations, appropriate year-end forms, and direct deposit using your own bank within its stated free-use conditions. Its optional tax-deposit and filing service and use of its bank for direct deposit carry charges. Scheduling tools may leave payroll to a paid add-on. Check the complete fee schedule and who handles deposits, filings and new-hire reporting; a free calculation tool does not transfer those legal responsibilities from the employer.

Compare the job being outsourced: calculations, payment delivery, or tax filing and remittance. At the current US list rate, Patriot Full Service costs $62/month for five employees before optional services. Contractor-only costs depend on the available product and payment count; Gusto closed its $35-base legacy Contractor-only plan to new customers on October 1, 2026, so that historical promotion is not a new-customer offer.

§2Genuinely free options (with major limitations)

Payroll4Free: its current official FAQ limits free basic service to nine or fewer individuals paid no more than once monthly. Basic services include tax calculations and direct deposit through your own bank. Having Payroll4Free remit and file taxes, or transfer deposits through its bank, costs extra. Its fee schedule lists Payroll Tax Service at $35/month for the first two tax authorities, with further authority and batch-posting charges. This is a specific low-volume option, not free unlimited payroll for twenty-five people.

Homebase (free scheduling tier): Homebase's free Basic plan covers scheduling and time tracking for one location and up to 10 employees. It does not include payroll, that requires the Homebase Payroll add-on at $39/month plus $6 per employee paid. The free scheduling tier is genuinely useful and the payroll add-on is priced in line with the rest of the category. But framing it as "free payroll" is misleading, and the free tier itself stops covering you the moment you hire an eleventh person or open a second location.

Wave Payroll ($40/month base): Wave offers free accounting and invoicing software, but the payroll add-on itself is not free and no longer has a discounted tier. Since Wave unified its US pricing in April 2025 through a partnership with payroll infrastructure provider Check, every account pays a flat $40/month plus $6/employee, with automatic tax filing included in all 50 states. For a 5-person team, that's $70/month, not free, and no longer meaningfully cheaper than Gusto Simple or OnPay. The Wave accounting + Wave Payroll combination is still worth evaluating if you also need free accounting software. Just don't expect a bargain on the payroll side.

§3Cheapest paid options: full-service payroll

Bottom line: if full-service payroll with automated tax filing is your requirement, Patriot Full Service at $37/month + $5/employee is the cheapest legitimate option. For a 5-person team, that's $62/month. The G2 "Best Value" badge in the small business payroll category consistently goes to Patriot. The trade-off for the low price: a dated interface, slower direct deposit (up to 4 days standard), and no mobile admin app.

§4Contractor-only: the cheapest compliant path

If you pay 1099 contractors rather than W-2 employees, the costs drop significantly. There are no employer payroll taxes for contractors, you pay them and consider Form 1099-NEC for reportable business payments of $2,000 or more, subject to recipient and payment-method exceptions in a calendar year (raised from $600 for payments made in 2026 and later under the One Big Beautiful Bill Act; 2025 payments still fall under the old $600 threshold). The software requirement is simpler: track payments, generate 1099-NEC forms at year-end, and handle payment logistics.

Gusto contractor payments: the legacy Contractor-only plan at $35/month plus $6 per paid contractor closed to new customers on October 1, 2026. Existing customers must check their applicable terms. New customers should compare the available plans, such as Simple at $49/month plus $6 per paid person, rather than assume a waived legacy base fee. Confirm payment geography and the included year-end forms for the selected plan.

For simple contractor payments by ACH or check, a business can track reportable payments and prepare the required forms through applicable IRS free filing options without buying payroll software. Confirm electronic-filing requirements and recipient exceptions. Qualifying card and third-party-network transactions are reported under Form 1099-K by the payment settlement entity, rather than duplicated on Form 1099-NEC. Multi-currency payments or frequent pay cycles can still justify a paid workflow.

§5Payroll4Free & TimeTrex: the truly-free tools and their catches

Two names come up repeatedly when people search for zero-cost payroll: Payroll4Free and TimeTrex. Both are real, both run live payrolls, and both attach conditions that matter once you read past the homepage.

Payroll4Free now describes free basic service for nine or fewer individuals paid at most once per month. Its official fee schedule lists payroll tax service at $35 monthly for the first two tax authorities, with $15 for each additional authority, and direct-deposit service through its bank at $35 monthly or $15 when paying for tax service. Direct deposit using your own bank is included in the basic offer. Batch frequency, payee count, tax authorities and requested services affect the bill; the fee-table boundaries and explanatory footnotes are not fully aligned, so obtain written confirmation for your exact pay schedule. The historical twenty-five-person limit and $12.50 add-ons are not a current offer.

TimeTrex is a different animal. Its free Community Edition is open-source time-and-attendance and payroll software you can self-host. That word, self-host, is the catch. You need a server, someone comfortable installing and patching a PHP/MySQL stack, and the willingness to configure tax tables yourself. There is no support line on the free tier and no guarantee tax rates stay current without your intervention. For a business with an IT person who wants full control, it works. For a non-technical owner, the time cost dwarfs the $40-50/month a hosted competitor charges.

The practical distinction is who runs the infrastructure and who files the taxes. Payroll4Free has a tightly limited free basic offer and paid tax-remittance options; TimeTrex Community requires self-hosting. Confirm payment delivery and filing responsibilities for the version you select.

§6Why free payroll is risky: tax filing, penalties, and no support

The sticker price is the cheapest part of payroll. The expensive part is getting federal and state tax filings right, on time, every quarter, and that is precisely what free tools tend to skip or do poorly.

Most free plans, including Payroll4Free's base tier, calculate your tax liability but leave the actual filing and remittance to you. That means you are personally responsible for Form 941 each quarter, Form 940 annually, W-2s and W-3s in January, plus state withholding and unemployment filings that differ in every state. Miss a federal deposit deadline and the IRS penalty starts at 2% and climbs to 15% of the unpaid amount depending on how late you are. A single missed quarterly deposit on a small payroll can erase a full year of 'savings' from skipping a $40/month full-service tool.

Multi-state complexity makes this worse. If you have one remote employee in another state, you now owe registration, withholding, and unemployment filings in that state too. Free tools rarely automate this, and they almost never flag the nexus obligations a new state hire creates. Paid full-service providers register and file across states for you; free ones hand you a form and wish you luck.

Check support separately from filing responsibility. Payroll4Free lists live customer service among its free basic services; other free offers may rely on documentation or community help. Ask who responds to an IRS notice or rejected filing, what assistance is included, and whether any penalty guarantee applies to the selected service. Live support alone is not a guarantee that the provider handles every tax obligation or pays every penalty.

Free payroll is not a scam. It is a transfer of liability. You save cash and take on compliance risk that a $17-49/month service would otherwise absorb. Whether that trade is smart depends entirely on how confident you are filing payroll taxes yourself.

§7Cheapest full-service: Patriot at $37+$5 and Wave

If the compliance risk above makes you nervous, the next question is the floor for *real* full-service payroll, meaning the provider files and pays your taxes. The answer is lower than most people expect.

Patriot Payroll is the value leader. Its Full Service plan runs $37/month base plus $5 per employee per month, and that $37 includes federal, state, and local tax filing and deposits. For a 3-person shop that is $52/month before optional services, with a tax-filing accuracy guarantee behind it. (Patriot's cheaper $17/month Basic tier skips tax filing entirely, you handle deposits and filings yourself, so it is not a full-service comparison point.) Patriot supports unlimited payroll runs, both W-2 and 1099 workers, and free direct deposit, and it holds a G2 score around 4.8/5, one of the highest in the category. There is also a self-service tier at $17+$4 where you handle filings yourself, but the full-service plan is the one worth paying the few extra dollars for.

Wave Payroll is the other budget-adjacent option, though it no longer undercuts Patriot the way it used to. Wave unified its US pricing in April 2025 through a partnership with payroll infrastructure provider Check: every account, in every state, now pays a flat $40/month plus $6 per employee, with automatic tax filing included nationwide. There is no cheaper self-service tier left for states outside the old tax-service list. Wave's appeal is the tight integration with its free accounting and invoicing tools, so a freelancer-turned-employer already living in Wave can add payroll without a new login, but the price itself now sits closer to Gusto and OnPay than to Patriot.

Gusto Simple and OnPay Payroll Essentials each list a $49 monthly base plus $6 per paid person. OnPay includes its payroll essentials, while enhanced HR and time tracking cost extra. QuickBooks Workforce Payroll has a standard US price of $50/month plus $7 per employee effective July 1, 2026; promotional or protected customers may have different applicable terms. Compare the services actually included before choosing on price alone. Patriot Full Service lists $37 plus $5 per employee before optional charges.

§8When free actually works vs when to pay

Free payroll is the right call more often than the paid vendors would like you to believe, but only in specific situations. The deciding factors are worker type, headcount, number of states, and how comfortable you are filing taxes yourself. The table below maps common scenarios to a recommendation.

The pattern is clear. Free works when you have a small W-2 headcount in one state and the discipline to file taxes on schedule, or when you pay only contractors. Free works if you self-host and have technical hands available.

Pay the moment you cross a state line, add benefits, grow past a handful of employees, or simply value not thinking about Form 941. At Patriot's $37+$5, the full-service jump is cheap enough that the real question is rarely 'free or paid' but 'how much risk do I want to keep.' For most growing businesses, handing off tax filing for the price of a couple of lunches is the obvious move; for a side business with one W-2 helper, staying free is perfectly defensible.

See also: Patriot Payroll alternatives for related options.

§9Frequently asked questions

Is Payroll4Free actually free? Only within its limited basic offer: the official FAQ allows at most nine people paid once in a month. The basic offer allows deposits from the employer bank account; outsourcing remittance or using the vendor bank adds charges. Ask for a written total that covers your pay frequency and tax authorities, instead of treating an old headcount cap as a current offer.

What does HR.my offer that Payroll4Free doesn't? HR.my allows unlimited employees at no cost; it skips tax calculation entirely, which makes it unsuitable for US businesses that need accurate federal and state withholding.

What's the real risk in going with a free payroll tool? Free tiers typically handle the math but leave tax filing and IRS payments to you. Missing a federal tax deposit due date triggers an IRS penalty starting at 2% and rising to 15%, scaled to how late the payment is [IRS, 2025].

Which option costs least if I don't want to self-file payroll? Patriot Payroll's Full Service tier costs $37/month with a five-dollar monthly employee charge, covering IRS, state, and local filing as part of that base price, making it one of the lowest-cost options that still hands off compliance.

Are free tools viable for a multi-state business? Rarely. Free tools seldom automate registration in multiple states, withholding, or state unemployment paperwork, and rarely catch the nexus obligations a new out-of-state hire creates.

Is free payroll a good fit if you only pay contractors? Often yes. Since there's no employer tax withholding for 1099 contractors, some platforms let you track what you send contractors and produce 1099-NEC paperwork when the year ends for free or close to it, since the compliance burden is much lighter than W-2 payroll.